November 27, 2006

 

CBOT Corn Outlook on Monday: 3-5 cents higher start seen on e-CBOT

 

 

Chicago Board of Trade corn futures are predicted to begin trading 3 to 5 cents higher Monday following the gains recorded in the overnight session and continued bullish enthusiasm, sources said.

 

In overnight e-CBOT trading, December corn rose 4 1/4 cents to US$3.73 1/2 cents per bushel and March gained 4 cents to US$3.90. e-CBOT volume in March was 13,970 contracts.

 

The market's recent bullish stance continued overnight and should spillover into the day session, a commission house analyst said.

 

Technically the market remains strong, with March setting a new life of contract high Friday, the dollar at 18 month lows, and the market was higher overnight which should all support prices, he added.

 

Higher prices metals prices and continued speculative buying interest should also provide interest in commodities overall as an asset class and help support corn, sources added.

 

In early trading, silver futures were trading more than 45 cents higher and gold was up US$9.00.

 

On day session open auction technical charts the bulls' next upside price objective remains closing prices above technical resistance at the contract high of US$3.72 per bushel. On Friday, December corn closed near the session high, at the weekly high close, and at a fresh contract high close. The bears' next near-term downside price objective continues to be closing prices below solid support at US$3.40. First resistance for December corn is seen at Friday's high of US$3.70 and then at US$3.72. First support is seen at Friday's low of US$3.62 and then at last week's low of US$3.57 1/2.

 

Cash corn basis bids were mostly unchanged Monday. Peoria, Illinois was up 1 cent at 3 cents over the December future.

 

In other corn news, cash prices of corn delivered to Asia may increase in the week ahead as CBOT corn futures look likely to continue to trade higher, continuing the rally that started in October, sources said.

 

Exporters are thought to have taken to the sidelines as prices remain in a rising trend. Over the past week, corn futures finished higher as technical strength, fund buying and overall bullishness in commodities supported prices.

 

South Korea plans to kill over 235,000 poultry in response to an outbreak of H5N1 bird flu. In addition, the country plans on killing dogs and cats in an effort to stop the spread of the disease even though there is no evidence that suggests that dogs or cats could pass the disease on to humans.

 

A CBOT floor analyst thought the news would have little impact as it appears that authorities had a good handle on quarantining the area.

 

China's corn exports in October fell to 73,467 metric tonnes, down 81.6% compared to last year and were down 68.9% on the year, the country's General Administrations of Customs reported Monday.

 

The Korea Feed Association's Pusan branch bought 110,000 metric tonnes of optional-origin corn from Cargill in a tender concluded late Friday, a Seoul-based trader said.

 

Corn futures on China's Dalian Commodities Exchange settled higher on bullish market sentiment. The benchmark May contract jumped RMB/42 to RMB 1,628/tonne.

 

Monday morning the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 10:00 a.m. CST and the weekly crop progress at 3:00 p.m.